It seems to make little sense for a country whose trade balance in oil has been in deficit for over two years to remain a member of a group called the “Organization of Petroleum Exporting Countries.”

Indonesian Minister for Energy and Mineral Resources Purnomo Yusgiantoro agrees, and announced Wednesday that the country would not renew its membership in OPEC at the end of the year, when its current term is set to run out. Purnomo noted that Indonesia would like to withdraw earlier but could not make up the difference in lost membership fees, which amount to some $3.1 million a year.

Conflict over price adjustments also played into Indonesia’s decision to disaffiliate from OPEC. Indonesia “would like world oil prices to fall while OPEC’s 12 other members would like prices to remain high,” said Purnomo. The nation of 235 million spends billions of dollars on subsidies, putting pressure on government coffers—a situation only exacerbated by high oil prices, which OPEC has little incentive to lower.

Dwindling foreign direct investment in petroleum exploration in Indonesia has played into the country’s lower oil production—which, after peaking in 1977, has been in decline since 1995. Bloomberg.com writes that squabbles with ExxonMobil over oilfield exploration may have factored in, and CNN Money reports that “corruption and a weak legal system … make oil companies wary of doing business in the country.” A 2004 oil and gas law also crimped investment.

Indonesia’s refining capacity is shrinking as well—another cut into the country’s fuel supplies, leaving it to rely on imports for one-third of national demand.

Indonesian President Susilo Bambang Yudhoyono said last month that Indonesia needs to up its petroleum production for domestic use. Oil for sale within Indonesia has dipped to a daily average of fewer than 1 million barrels.

The Organization of Oil Exporting Countries (OPEC) was created in 1960 at the Baghdad Conference by Iraq, Iran, Kuwait, Saudi Arabia and Venezuela. Nine other countries joined later: Qatar, Indonesia, Libya, the United Arab Emirates, Algeria, Nigeria, Ecuador, Gabon and Angola. OPEC’s current headquarters are in Vienna. The group’s main goals are “to coordinate and unify petroleum policies, in order to secure fair and stable prices for petroleum producers; a regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.”

Kurtubi, director of Indonesia’s Centre for Petroleum and Energy Economic Studies, believes the country’s December withdrawal from OPEC will better serve national energy strategy. “It’s the right decision because Indonesia wants oil prices to fall to stop its state budget bleeding as much as it has been recently. It will also act as a warning to the industry and society that the country must do something to increase production.”

Singapore-based energy consultant Tony Regan said Indonesia’s move was at least partly a populist political ploy. He writes of the government, “How can they show concern about domestic oil prices and expect people to pay more at a time when they are also part of an oil cartel that is trying to push prices up?” Indonesia’s dropping out will likely have little effect on OPEC’s total oil output. Indonesia’s oil production accounted only for some 3 percent of the bloc’s production last month.

Brazilian President Luiz Inácio Lula da Silva wants his country to join OPEC, an action he says could help lower worldwide petroleum prices. The country’s newly-discovered Carioca field could hold up to 33 billion barrels of petroleum, however this number has drawn skepticism from some industry experts.